I've recently configured the system I use as a media pc. It's very light-weight, yet so far suits my needs perfectly. I don't use the pc as a dvr (I don't have cable), so it's not a complicated setup. Here's the basics:

Window manager: ratpoison

Video playback: mplayer

Audio playback: mpd

Browser: Firefox 3.6.3

Remote control: ssh, synergy, samba

BitTorrent client: rtorrent

The basic installation is Debian Lenny (Currently Debian Stable) from the netinst CD, with no software packages selected (no Desktop Environment, no Standard System, etc). The basic installation is described here.
I'm in the habit of keeping track of what packages I install on a new system, as well as a few other basic configuration tasks. Here's my install.log for this system: